Assume the football team is set up as a general limited liability company (LLC) and that Lenny, Sarah, and Sam are the owners of the LLC and it is a member-managed firm. Which of the following is incorrect?
- The profits from the team would pass through to the partners unless the LLC chooses to be taxed as a corporation.
- If any of the members were to act in the management of the team, they would lose their limited liability.
- Distribution of the profit among the partners is set by statute.
- The company must be formed through compliance with state statutes.